It’s worth bearing in mind that the experience of those living through your extreme scenario will vary greatly based on age.
Someone just starting their career benefits from cheap assets, high rates mean down payments will probably be cheaper, stock declines don’t matter if you don’t hold stocks. High inflation means their wages relative to debts such as student loans or first mortgages will increase.
Retirees with fixed incomes might get crushed. These folks were pushed into stocks and alternatives due to low interest, declining assets remove income and high inflation reduces the real value of the income.
There are a lot of people in between who will experience churn. However given the current demographics of the US, having two groups experiencing different versions of the economy will pose political as well as economic challenges.
Someone just starting their career benefits from cheap assets, high rates mean down payments will probably be cheaper, stock declines don’t matter if you don’t hold stocks. High inflation means their wages relative to debts such as student loans or first mortgages will increase.
Retirees with fixed incomes might get crushed. These folks were pushed into stocks and alternatives due to low interest, declining assets remove income and high inflation reduces the real value of the income.
There are a lot of people in between who will experience churn. However given the current demographics of the US, having two groups experiencing different versions of the economy will pose political as well as economic challenges.